Anyone ever taken over a car lease from someone they didn't know?

[Wailer]

An acquaintance of a friend has a 2012 MB GLK 4matic that is 12 months into a 2-year lease. He claims he just wants someone to take over the $500/mo (ouch) payments. It has 13,000 of its 25,000-mile allowance (no prob since we drive about 8K mi/yr). It is pretty loaded with features that aren't that important to us, but we could probably learn to appreciate .

The MSRP (with delivery but before tax) is about $47.5k. The residual value at the end of the lease is $31k, which I think is a good price for a 2-year old, 25k-mile car. However, the payments are around $500/mo and would need to be made for 12 months. That actually makes the residual value more like $36k. Plus I'd have to insure it the way the leasing company wants it insured, ie fully-insured with low deductibles.

Still it's a good price for a car that I can opt not to buy if it turns out to be a money pit or my wife decides she doesn't like it (unlikely since she's driven an ES300 the last 15 years).

Other than having a mechanic check it out, making sure the title is clear (not a salvage or in any major accidents), reviewing the leasing doc, seeing maintenance records and making sure their aren't outstanding tickets or liens, is there anything else I need to watch out for when taking over a lease? I've never leased a vehicle but I've heard horror-stories when you return a car that they deem isn't in perfect condition; however, it's likely we would wind up buying the car (as long as it's not a lemon).

I figure a similarly configured 2013 could be negotiated to around $45k. So this is effectively knocking $9k or 20% for 1-year of depreciation. Worth it? I know it's a lot for a car but my wife deserves it with all the crap she puts up with and for driving the same car for the last 15 years.

[p8712]

So...you want to pay $6k to rent a car for a year?

[davester]

Everything sounds OK except that the deal is completely insane. Why not just take the money and flush it down the toilet? Unless you're a business that can write off the entire lease cost, leases in general are a terribly expensive way to own a car...a sucker's game. Also, the second half of the lease is an even worse deal than the first part, since you're paying the same rate for car depreciation even though the depreciation is less than during the first half of the lease. There are many ways to get your wife into a much nicer car than her 15 year old junker without sacrificing the family finances.

[Buck]

I'll stick with my policy. Let someone else pay for the big depreciation hit, and I'll buy a 1-2 year old vehicle at a big discount.

[zero]

Wailer wrote:
It is pretty loaded with features that aren't that important to us.

That pretty much sums it up.

It sounds like you are trying to rationalize this as "getting a deal" rather than your needs

[Marc Anthony]

I'm not sure what you're talking about with the $31K residual value being $36; the residual is a guaranteed amount. You can always make a lower offer than the residual, if you want to purchase. Purchasing outright makes more sense if you plan to keep a car for more than 1.5 times the lease term. Assuming a lease seems like it could be fraught with a variety of problems. I think you might negotiate a better deal for yourself by going to a dealer, rather than an "acquaintance of a friend", which sets off alarm bells in my mind.

[Wailer]

Thanks for the comments.

I'm aware that I may rationalizing a deal rather than purchasing for our needs. However, there is something appealing about buying a used car that gives me a 1-year option to buy at a good price. The cost of that option is a bit pricey but I can negotiate that with the seller (ie, he throws in some cash). I know leases are generally for suckers but that is because you amortize a majority of the depreciation. However in this situation, it is taking over someone else's lease who put a substantial down payment down and has already taken 34% of the depreciation hit based on MSRP and residual value (maybe closer to 25-28% if he negotiated the cap cost).

Has anyone ever taken over someone's lease? I'd like to hear the caveats of that.

[Marc Anthony]

The 2013 4Matic is $419 through Mercedes for 30 months. There is some cash down due, but your trade might take care of that. I don't know this as a fact, but I'd assume that any new MB lease would come with a maintenance package and/or service loaner car that likely can't be transferred to someone who assumes a lease. Research that.

[Wailer]

Thanks MA. That's a good point about the maintenance package/loan car possibly being non-transferable. I wasn't putting much value on it since the maintenance package is only for 12 months. Thanks also for pointing out the current lease offer too. I doubt I'd ever lease a new car even though I can deduct it. It's not just the depreciation aspect, but I prefer to self-insure when the premium exceeds the expected value of the payout (likelihood of accident * amount insurance company would pay). I can't do that when it's leased or financed.

I guess what it boils down to is if it's worth buying this a familiar, used 2012 GLK 4matic w/20k miles for $31k in 12 months. If it is, how much is it worth to have that option?

[Speedy]

Check kbb.com.